Aug 10, 2025 · What Is an Externality? An externality occurs when an activity by one party causes a cost or benefit to another party. These effects can be either negative or positive.

The concept of externality was first developed by Alfred Marshall in the 1890s [1] and achieved broader attention in the works of economist Arthur Pigou in the 1920s. [2] The prototypical …

Externalities occur when producing or consuming a good cause an impact on third parties not directly related to the transaction. Externalities can either be positive or negative. They can …

What is an Externality? An externality is a cost or benefit of an economic activity experienced by an unrelated third party. The external cost or benefit is not reflected in the final cost or benefit …

Externalities refer to the cost or benefit experienced by an entity without producing, consuming, or paying for it. It implies that this indirect cost or benefit affects an entity other than its producer …

Some argue that wealth itself has an externality: inflaming envy. Others maintain that there are externalities of altruism—when I give money to help the poor, everyone else who cares about …

1 day ago · What Is an Externality? An externality is a cost or benefit that is caused by one party but financially incurred or received by another. Externalities can be negative or positive. A …

The meaning of EXTERNALITY is the quality or state of being external or externalized. How to use externality in a sentence.

Externalities, which can be either positive or negative to the affected parties, are a form of market failure resulting in inefficient market outcomes. Negative externalities are an important concept …

An externality occurs whenever the activities of one economic agent affect the activities of another agent in ways that do not get reflected in market transactions.